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Ford India ceases production and sales effective immediately

Ford is now ending the production of vehicles for sale in India. The construction of export vehicles in the Sanand plant ends on December 31, 2021. Ford is also closing plants for engine and body construction in Chennai.

Around 4,000 employees will be affected by the cessation of production. The company draws up a social plan for those affected together with trade unions, dealers and the government. In total, the American car manufacturer has more than 11,000 employees in India. As Ford further reports, however, the division will be expanded with development and software services at the Chennai site. Ford put the cost of this conversion at two billion US dollars (1.7 billion euros).

Demand for new cars overestimated

In the past ten years, the car manufacturer has accumulated operating losses of more than two billion US dollars. In it he admitted that the demand for new cars in the country was estimated to be higher.

Ford wants to only offer imported vehicles in India in the future, including the Mustang and the new hybrid and electric cars - including the Mustang Mach-E. Current products such as Figo, Aspire, Freestyle, Eco-Sport and Endeavor will be discontinued once existing dealer stocks have been sold. However, the manufacturer continues to offer full customer service for these vehicles with service, spare parts and warranty services.

Three million new cars per year

In India, with a population of 1.36 billion people, only around three million new vehicles are sold every year. A peculiarity makes it difficult for many car manufacturers to gain a foothold in the market. With the joint venture between Suzuki and the Indian state, Maruti Suzuki dominates the car market with a market share of 48.99 percent (2020). In the sales top 10 of the past year alone there are six Maruti models and ten in the top 20 (see slide show). The electric car market share in India was 0.16 percent in 2020.

Conclusion

Ford will stop producing and selling locally built vehicles in India. The construction of export vehicles, engines and bodies will also end by mid-2022 at the latest. Instead, vehicles including hybrid and electric models will be imported. However, the market share of these cars is only 0.16 percent. More than 4,000 employees are affected by the closures.

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